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Beyond Budgeting: Why CEOs Need an Annual Operating Plan
Q&A with a few of Westlake’s CFO Services Team
Q&A with Kevin Brady, Head of CFO Services, and Colin Chapman, Vice President, CFO Services at Westlake Securities
As CEOs look ahead to 2026, many are working through budgets and forecasts. But focusing only on numbers can mean missing the bigger opportunity: building an Annual Operating Plan (AOP) that aligns strategy, teams, and capital readiness.
We sat down with Kevin Brady (KB) and Colin Chapman (CC) to talk about why CEOs should think beyond budgeting, what makes an effective AOP, and how to get started.
> Q: Kevin, in a recent report you wrote, you state that many CEOs think of “budget season” as a necessary grind. Can you talk about how writing an Annual Operating Plan is different?
KB: For many CEOs, budgeting feels like a box-checking exercise. I’ve had CEOs tell me, “Kevin, I know this is important, but it feels like busy work.”
An Annual Operating Plan changes that. It’s not just about forecasting revenue and expenses, it’s a blueprint that connects your strategy to execution.
I worked with a manufacturing CEO last year who had always done budgets the same way: roll last year’s numbers forward by 5% and call it done. Once we walked through an AOP process, he realized his sales team’s goals weren’t aligned with his capacity investments, and that gap could have cost him a major growth opportunity. The AOP forced him to connect the dots between strategy, operations, and finance, and the payoff was huge.
It gives you and your stakeholders confidence that you’re not only setting targets, but actually laying out a clear, actionable path to achieve them.
> Q: How does an AOP help CEOs when it comes to growth, M&A, or raising capital?
KB: When you’re raising capital or considering an M&A process, discipline matters. Investors and lenders want to know you’re steering the ship with clarity, not just hoping for smooth seas.
I’ll give you an example: a client in the services sector came to us looking for growth capital. In early conversations, investors kept asking, “How are you going to hit these projections?” Because the CEO had built a thoughtful AOP, he could point directly to his customer acquisition strategy, pricing model, and operational upgrades. That shifted the tone of the conversation — from defending projections to demonstrating readiness.
CC: That level of planning doesn’t just build trust; it improves valuations and speeds up financing conversations. Investors can see that the numbers are backed by a real operating strategy, not just optimism.
> Q: What are the key elements that should be included in a strong AOP?
CC: I always encourage CEOs to think about five essentials:
When all of these are present, an AOP becomes more than a financial document — it’s a playbook for the business.
> Q: CEOs are busy. How can they make the most of the AOP process without it taking over their calendars?
KB: That’s one of the biggest challenges I hear. My advice is: don’t do it in a vacuum. Involve your leadership team and trusted advisors. Make the process collaborative.
One CEO told me, “Kevin, I don’t have time for another 80-hour planning process.” I told him: “Good — because if you’re doing it right, you shouldn’t have to.”
CC: The best AOPs are ambitious but practical. They set stretch goals grounded in reality, and they include checkpoints so you can adjust as conditions change. I often encourage CEOs to treat the AOP as a series of shorter working sessions with their teams, not a marathon locked in a conference room.
It’s less about building a “perfect” plan and more about creating alignment, discipline, and focus across the business.
> Q: What’s your message to CEOs heading into 2026?
CC: Don’t settle for “just making a budget.” Use this season to chart a smarter path forward.
KB: I’ll never forget a CEO who once said to me, “I finally realized that if I didn’t take control of the plan, the plan was going to take control of me.” That’s exactly the mindset shift an AOP creates, from reactive to proactive.
If you want to grow, raise capital, or prepare for a transaction, the time to put that plan in place is now. At Westlake Securities, we work with CEOs every day to build operating plans that give them confidence and credibility with investors.
Next Steps For CEOs